## Facts

- Mercator Line, Inc. (Mercator) entered into a vessel charter arrangement with Witte Chase Corp. (Witte Chase).
- The charter documentation included the clause: “Acct Witte Chase or nom, if nom then same to be gur by Witte Chase.”
- The clause contemplated performance either by Witte Chase itself or by a nominated substitute; if a nominee performed, Witte Chase would “gur” (guarantee) the nominee’s performance.
- Witte Chase nominated Ferromet Inc. (Ferromet) to perform under the charter.
- Ferromet allegedly failed to perform its charter obligations.
- Mercator sued Witte Chase for damages, asserting Witte Chase was liable based on the nominee-guaranty clause.
- Witte Chase argued New York law controlled and that, under New York’s Statute of Frauds, a guaranty/surety obligation must be evidenced by a sufficient writing.
- Witte Chase contended Mercator’s pleading theory depended on an oral agreement and moved to dismiss.

## Issues

1. Whether the nominee-guaranty clause in the charter materials stated an enforceable guaranty by Witte Chase for Ferromet’s nonperformance.
2. Whether the claim was barred at the pleading stage by New York’s Statute of Frauds, given the maritime character of the charter-party guaranty.

## Decision

- The court treated the alleged guaranty as part of a charter-party transaction and therefore as a maritime contract for admiralty purposes.
- Applying maritime-contract principles, the court rejected dismissal based on the New York suretyship Statute of Frauds theory.
- Witte Chase’s motion to dismiss was denied.

## Legal Principles

- A charter party is a maritime contract, and obligations closely connected to charter performance—such as a promise to guarantee a nominee’s charter performance—may also be maritime in nature.
- When payment of money is itself the promised performance of a maritime obligation (e.g., charter hire), a related guaranty can fall within admiralty contract jurisdiction rather than being treated as a purely land-based financial arrangement.
- Federal maritime law generally permits enforcement of maritime agreements without importing state Statute of Frauds rules that would defeat maritime contract enforcement at the pleading stage.
- A “nominee” clause stating that performance by the nominee is to be “gur by” the nominating party may be construed as a guaranty undertaking, supporting guarantor liability if the nominee defaults.

## Conclusion

Mercator Line, Inc. v. Witte Chase Corp. holds that a charter-party clause providing that a nominee’s performance would be “gur by” the nominating charterer states a maritime guaranty claim, and the court refused to dismiss the action on a New York Statute of Frauds theory because the guaranty was treated as a maritime contract governed by maritime-law principles.


Mercator Line, Inc. v. Witte Chase Corp., 1990 U.S. Dist. Lexis 4425 (1990)